Key Topic – Other Trade Agreements
The EU recently signed an FTA with Vietnam, which is likely to take effect in 2017 or early 2018. EU exports of both beef and pork to Vietnam have been increasing since the EU lost access to the Russian market. Officials from the EU and the Philippines, also a rapidly growing market for EU meat exports, held their first round of FTA talks in May 2016 and their second round in February 2017.
It is estimated that by 2030, two-thirds of the world’s middle class will live in Asia. The United States currently has trade agreements with only two countries in Asia — South Korea and Singapore. This could become problematic if the Regional Comprehensive Economic Partnership agreement moves forward as expected. China is at the center of RCEP, which also includes Japan, South Korea, Australia, New Zealand, India and the 10 member countries of the Association of Southeast Asian Nations. If RCEP is ratified, Asia’s largest regional trade agreement will not include the United States.
Australia and China recently finalized a free trade agreement that will eliminate tariffs (currently 12% on chilled/frozen beef) on Australian beef over a period of nine years – similar to the terms of the FTA China has in place with New Zealand. The FTA took effect in December 2015 with an initial round of tariff reductions. Additional tariff reductions were implemented on Jan. 1, 2016 and Jan. 1, 2017.
South Korea has entered free trade agreements with Australia, Canada and New Zealand. The FTA with Australia came into force Dec. 12, 2014, the FTA with Canada took effect Jan. 1, 2015, and the FTA with New Zealand took effect in December 2015. The tariff reduction schedules for beef and pork are similar to those included in the Korea-U.S. FTA. There are no “catch-up” provisions, however, so the U.S. will retain a tariff rate advantage over Australia, Canada and New Zealand until these countries’ products reach zero duty.